There was an article posted on Yahoo Finance today from Andrew Taylor of the associated press. I’ve pasted the article below just in case this link to it becomes unusable. In it, Taylor discusses a new report by the Congressional Budget Office (CBO), America’s non-partisan financial watch dog. In a nutshell, it ain’t good.
According to the Taylor article, it seems the White House has understated the impact of Obama’s spending over the coming decade by about 14%. Over the next 10 years, the CBO expects another $9.8 trillion to be added to the national debt.
So I decided to have a look at this report for myself. The report contains a table that shows the revised annual budget deficit projections for the years 2010-2020. Are they crazy?!?
George Bush, not the most thrifty person in the World, left the nation in debt to the tune of just under $10 trillion at the end of 2008. If the CBO is correct, the Obama administration will have nearly doubled this debt by the end of his 2nd term (assuming he gets relected). The true doubling point comes just 18 months after he leaves office. By the end of 2020, the national debt is expected to be 23.14 trillion dollars. We will be paying almost a $1 trillion a year on the interest alone by then. (CBO estimate of interest in 2020 is $916 billion.)
Folks, this is no longer a partisan debate. It’s not about Democrats or Republicans. It about our children’s future.
The article below is by Andrew Taylor, Associated Press Writer.
WASHINGTON (AP) — A new congressional report released Friday says the United States’ long-term fiscal woes are even worse than predicted by President Barack Obama’s grim budget submission last month.
The nonpartisan Congressional Budget Office predicts that Obama’s budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That’s $1.2 trillion more than predicted by the administration.
The agency says its future-year predictions of tax revenues are more pessimistic than the administration’s. That’s because CBO projects slightly slower economic growth than the White House.
The deficit picture has turned alarmingly worse since the recession that started at the end of 2007, never dipping below 4 percent of the size of the economy over the next decade. Economists say that deficits of that size are unsustainable and could put upward pressure on interest rates, crowd out private investment in the economy and ultimately erode the nation’s standard of living.
Still, the Feb. 1 White House budget plan was a largely stand-pat document that avoided difficult decisions on curbing the unsustainable growth of federal benefit programs like the Medicare health care program for the elderly and Medicaid, which provides health care to the poor and disabled.
Instead, Obama has created an 18-member fiscal reform commission that’s charged with coming up with a plan to shrink the deficit to 3 percent of the economy within five years. But the Republicans to be named to the panel by congressional GOP leaders are unlikely to go along with any tax increases that might be proposed, which could ensure election-year gridlock.
“While the president is intent on ramming through Congress a new trillion-dollar health-care entitlement, he appears far less concerned with addressing the looming crisis of entitlement spending already on the books,” said Rep. Paul Ryan of Wisconsin, the top Republican on the Budget Committee. “Instead, he delegates this task to a ‘Fiscal Commission’ — which would not even report until after the next election.”
The report says that extending tax cuts enacted in 2001 and 2003 under GOP President George W. Bush and continuing to update the alternative minimum tax so that it won’t hit millions of middle-class taxpayers would cost $3 trillion over 2011-2020. The tax cuts expire at the end of this year and Obama wants to extend them — except for individuals making more than $200,000 a year and couples making $250,000.
For the ongoing budget year, CBO predicts a record $1.5 trillion deficit. That’s actually a little better than predicted by the White House, but at 10 percent of gross domestic product, it’s bigger than any deficit in history other than those experienced during World War II.
The new report predicts that debt held by investors, including China, would spike from $7.5 trillion at the end of last year to $20.3 trillion in 2020. That means interest payments would more than quadruple — from $209 billion this year, to $916 billion by the end of the decade.